Choose direct booking

“That’s way you should book direct” — the article in Horecanytt (Horeca news) is a clear message from CEO in Classic Norway Hotels, Stephen Meinich-Bache.

According to Meinich-Bache the hotels pays approximately 25% commission for all bookings via booking.com, hotels.com and the other booking platforms. For the future, he wants a Scandinavian-owned booking platform to compete with the big global ones. In my mind, an interesting idea, but it would probably not solve the whole problem and save the hotels a lot of money.

I had the pleasure of having Meinich-Bache in the studio in our podcast Oppdrift. We both hope most Norwegians will spend their holiday budget within the country borders. I promise me and my family will contribute with our share.

Direct booking means 25% increased margins for the hotels, which is a great deal during these difficult times when many hotels are struggling to survive.

I believe the travel industry need to focus more on building their own brand and awareness, instead of having a sole focus on booking platforms. 

For the last 10 years the booking platforms (OTAs) have fed Norwegian hotels with bookings and income — and been great platforms for marketing and sales for the travel industry.

Check out these numbers:

• Total turnover for the OTAs: 130 billion (2018)
• Total online marketing budget: 45 billion (2018)
• Total online marketing budget in Norway for all businesses: 7,4 billion (2019)

The Norwegian Travel Industry have been dependent of the OTAs, and at the same time they lose 25% of the income per booking. In comparison the travel agencies back in the days had a commission of 5-8% per booking. 

On the other hand, if the hotels stop using the OTAs, they will most probably have substantially less bookings. They are dependent of the OTAs and their marketing channels, and they have accepted loss in margins per booking. At last but not least, they have lost their own ability to do their own marketing as there’s no budget left for it. The OTAs “own” the online search engines and the same time many hotels own booking systems are poor and outdated. In other words, the hotels’ reputation is in the hands of the technology supplier who only has their own interest in mind. The OTAs bank accounts grow fatter as the hotel brands lose impact, has low awareness and knowledge. 

What to do?

In the long term it would be a great idea to look into restructuring the economic model of the industry. The whole industry should cooperate and create common tools. I believe in a model where each company need to take a greater risk and pay a higher cost to build their own brand. I believe in local, regional and national collaborations. I believe in constellations like Classic Norway Hotels, with long term capital and a close relationship with the ones that are close to the customers. 

Meinich-Bache wants a new booking platform owned by the travel industry. Perhaps a platform through Visit Norway or something brand new could challenge the big OTAs? This would need substantial investments and cooperation from all the participants, so everyone involved stopped using the OTAs altogether. 

Before this happens, we need better booking systems as well as to invest more in marketing, both nationally and locally. In our podcast episode, Meinich-Bache says we need a Travel Minister with the power to coordinate all this. I couldn’t agree more.

In the meantime, let’s do what we can to help our own travel industry, which means a lot to our own identity and Norway’s reputation. Please book directly with the hotel, spend some time on the internet to find their webpages, or call them if their booking system is not up to date. It’s nice to have a little chat with the ones you’re going to stay with.

Have a great Norwegian directly booked holiday!